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Disqualification of directors - Coggle Diagram
Disqualification of directors
Directors may be disqualified under the CDDA1986 either automatically as a result of a speicifc event or where application has been made to the court that a person is unfit to be a director
A person who has been disqualified may not during the period of disqualification be a director, liquidator, administrator, receiver or manager of a company whether directly or indirectly, without the consent of the court
Contravention of a disqualification order is a criminal offence punishable by up to two years imprisonment or an unlimited fine
Application for disqualification is made under the appropriate provision of the CDDA1986 and disqualification may be automatic or discretionary
Disqualification for unfitness
The court is obliged to disqualify a person who was or is a director of an insolvent company where their conduct makes them unfit to be involved in the management of the company
A director can be found unfit to be a director as a result of either their actions or inaction
Disqualification on conviction
The courts may make a disqualification order if a person has been convicted of an indictable offence in connection with the management, promotion, formation or liquidation of a company
Disqualification for breach of statutory obligations
A disqualification order may be made for persistent failure to file accounts or confirmation statements or other documents required to be filed with Companies House or failing to keep statutory records
Disqualification for fraudulent or wrongful trading
A disqualification order may be made against a person if during the course of winding up, it appears that they are guilty of an offence under CA2006 s.993 for fraudulent trading or have committed some other offence or breach of duty or where the director is required to contribute to the company's assets for insolvent trading
Disqualification in the public interest
The Secretary of State has power to apply to the courts for a disqualification order on the grounds of public interests
This would usually follow from an equity by the Department for Business, Energy and Industrial Strategy (BEIS) inspectors
Disqualification undertaking
The Secretary of State may where an individual would otherwise be subject to disqualification proceedings under CDDA1986 ss. 7 and 8 accept a disqualification undertaking from that person
Competition disqualification order
The court must make a disqualification order (max 15 years) against a person if a company of which that person is a director commits a breach of competition law and the court considers the conduct of that person makes them unfit to be concerned in the management of a company
Competition undetaking